[Click e-Stock] "LG Uplus Faces Short-Term Sell-on-the-News Pressure... Long-Term Stock Price Upside Expected"

On June 27, Hana Securities raised its target price for LG Uplus from 14,000 won to 16,000 won, citing the company's strengthened long-term shareholder return policy and the high likelihood that it is entering a full-fledged earnings improvement cycle. The investment rating was maintained at 'Buy'.

Hana Securities noted that expectations for LG Uplus's treasury share cancellation and additional buybacks, as well as anticipated improvement in second-quarter earnings, have already been reflected in the stock price. As a result, if the actual shareholder return policy and earnings are announced, a short-term sell-on-the-news phenomenon (where the stock price falls despite positive news) may occur. Nevertheless, Kim Hongsik, a researcher at Hana Securities, stated, "Value-up catalysts are now in full swing and the stock remains undervalued," adding that from a medium- to long-term perspective, there is still significant upside potential.

LG Uplus is expected to not only cancel 1.6% of its existing treasury shares but also initiate a new treasury share buyback worth 100 billion won. Kim explained, "However, over the past three months, these factors have already been sufficiently priced into the stock," and added, "For the stock price to rise further, there must be heightened expectations for increased shareholder returns as the company enters a full-fledged profit growth phase, or increased expectations for long-term mobile revenue growth due to a restructuring of 5G pricing plans." He identified September or later as the likely timing for a renewed upward trend in the stock price.

Kim also stated, "As the frequency auction is conducted, expectations for the launch of next-generation service plans may rise, and based on the third-quarter preview, expectations for long-term profit growth will expand." He added, "Although earnings from 2026 onward should be applied, the stock price may reflect these in advance, so the long-term outlook for the stock remains bright."